SA bid sees drug industry at odds over patents threat

By Time of article published Feb 3, 2014

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A dispute has erupted in the pharmaceutical industry over how to respond to a government proposal in South Africa to allow local manufacturers to copy brand-name drugs and sell them in the country at a lower cost.

The proposed policy would mirror a strategy in India, which in the past two years has weakened patent protection on Novartis’ Gleevec and Bayer’s Nexavar cancer treatments.

The issue has put South Africa at the epicentre of a new battle over intellectual property (IP), and opened divisions within the industry over how best to fight back.

While drugmakers agree the challenge to patent rights would hurt them financially, they have split over how best to push back. “South Africa is ground zero for the debate on the value of strong IP protection,” according to a plan drawn up by a US-based consultant to the Innovative Pharmaceutical Association South Africa, an industry trade group.

“If the battle is lost here, the effects will resonate” in countries such as India and Brazil. The renewed battles on IP echo a controversy more than a decade ago when drugmakers were attacked for charging high prices on HIV drugs in South Africa and elsewhere at the height of the Aids epidemic.

The “excessive insistence” on intellectual property protection at that time was “the global low point” in the effort to spread free trade, said Lawrence Summers, president emeritus of Harvard University.

Drugmakers say protection of intellectual property is needed to help fund development of new products and limit the export of generics to countries where patents remain valid.

The companies disagree about the best response to the South African government’s plan. After the trade group considered a public relations campaign to spend $450 000 (R5 million) to oppose the government proposal, Novo Nordisk quit the organisation citing a disagreement on the campaign, “which we felt did not serve our or the industry’s interests”, said Shelley Harris, a spokeswoman.

Merck’s MSD Southern and East Africa unit solicited proposals from consulting firms and gaining support for the selected campaign. In an e-mail describing the proposed campaign, Michael Azrak, managing director, urged companies in the association to “please discuss and gain agreement from your above country/global headquarters on our planned approach.” – Bloomberg

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